The president of the Federal Reserve Bank of Philadelphia wants banks and credit unions to set aside their differences and work together to serve low-income areas.
"The door is open for partnership agreements that benefit both banks and credit unions but do even more to help rebuild their communities," Edward G. Boehne said in a speech prepared for delivery Saturday at a conference sponsored by the National Credit Union Administration.
Banks could supply inner-city credit unions with low-interest, long-term deposits, he said. The credit unions, in turn, could loan these funds to residents.
Banks also could provide free or reduced-rent office space to credit unions, he said. Several banks that have merged recently have tried to mitigate the harm to communities from branch consolidations by following this tactic, he said.
All of these efforts can earn a bank credit under the Community Reinvestment Act, he noted.
Credit unions also could help banks with their community development efforts, he said. For example, a credit union could loan a potential homebuyer the cash for closing costs on a bank-issued mortgage, he said. It also could fund homebuyer education, he said.